Oktex Pipeline Company

Original Volume No. 1

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Effective Date: 04/15/2002, Docket: RP01-183-001, Status: Effective

Substitute Original Sheet No. 40H Substitute Original Sheet No. 40H : Effective

Superseding: Original Sheet No. 40H

XXXVI. SEGMENTATION

(a) A Shipper may segment its firm capacity to the extent operationally feasible. In

addition, any Shipper may segment its firm capacity in releasing to a Replacement

Shipper to the extent operationally feasible. A Shipper segmenting its own firm

capacity shall effectuate such segmentation through the nomination process under

this Section. A Shipper may release firm capacity on a segmented basis to the extent

consistent with this Section by following the procedures set out in Section XXXIII

of these General Terms and Conditions.

(b) For the purposes of this Section, a segmentation of firm capacity (whether of

Shipper's own capacity or on release)shall be deemed operationally feasible unless:

(i) the segmentation would result in an increase in firm contractual obligation by

Transporter on any segment or portion of its system; or (ii) the segmentation would

result in a physical haul in a direction opposite to the primary path under the

Agreement being segmented, absent a determination by Transporter that it can

physically perform the segmentation as requested; (iii) transportation obligation on

a segment of pipe with respect to which the transporter is not otherwise obligated

to provide transportation service to the shipper requesting segmentation of

capacity. Transporter will communicate its determination under (ii) above within

two (2) hours after the Shipper requests such segmentation.

(c) In the event a path is segmented, the secondary points upstream or

downstream shall be equally available to each Shipper so long as the combined

nominations of the releasing and replacement shipper do not exceed original

contract demand.

(d) The direction of flow for path segments must be the same direction of flow

for the original path. The Shipper (or Replacement Shipper in the case of a

release) may nominate service at Receipt and Delivery Points for the path

segment that results in a reverse flow from the original path; however, a

physical forward-haul will be subject to maximum forward-haul rates if the

original path is physically a backhaul, unless otherwise agreed to in writing.

Subject to available capacity, forwardhauls and back-hauls to the same point on

a transportation path will be permitted If a discount applies to the original

point, the discount will continue to be applied to the extent a similarly

situated shipper is receiving a discount at the alternate point, Transporter

will respond to any requests for a discount within (2) days of such request.

(e) Subject to the availability of firm capacity at the primary point(s), unless

Transporter determines that it is not operationally feasible. The new primary

point(s) must be within the original primary path of the Agreement if it is all

within the same discrete pipeline. Transporter shall not be obligated to reserve

firm capacity to reinstate the former primary points upon expiration of the

segmentation or the capacity release if such firm capacity has been contracted

for by another party.

(f).Transporter will afford a higher priority for mainline capacity to shippers

seeking to use mainline capacity outside of their path, unless Transporter can

demonstrate that such priority is operationally infeasible or leads to anti-

competitive outcomes on its system.